January 30, 2014 / 6:30 AM / 4 years ago

Europe Factors to Watch-Shares set to pause, earnings in focus

PARIS, Jan 30 (Reuters) - European stocks were set to open mostly unchanged
on Thursday, halting a week-long slide as investors comb through a raft of
corporate earnings, but data showing China's manufacturing measure slipping to a
six-month low and a further cut in the U.S. Federal Reserve's stimulus kept
investors on edge.
    At 0732 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were flat to up 0.2
    European stocks have sharply retreated over the past week, with the
FTSEurofirst 300 index of top European shares losing 4.2 percent in
five sessions, as mounting concerns over a number of emerging economies prompted
investors to dump risky assets such as equities.
    Pointing to a weak start for China's economy in 2014, the Markit/HSBC final
manufacturing PMI for January dipped to 49.5 from December's 50.5. A reading
below 50 indicates a contraction while one above shows expansion. The figure was
in line with the 49.6 reported in the preliminary version of the PMI released a
week earlier. 
    Late on Wednesday, the Fed said it would trim its bond purchases by another
$10 billion, as it stuck to a plan to scale back its stimulus despite recent
turmoil in emerging markets. 
    Last month, the Fed announced that it would start scaling back its
quantitative easing programme, which had spurred a strong rally in equities
worldwide in 2013. The move has prompted investors to repatriate investments
from emerging markets, which have suffered massive outflows in the past weeks.
    "There had been some suggestion that this week's volatility in emerging
markets might have given the Fed pause, but this was never a realistic
possibility as it would merely be delaying the inevitable, and would not have
sent a good message to the markets," Michael Hewson, chief market analyst at CMC
Markets, wrote in a note.
    Investors' focus will also be on corporate results on Thursday, with
earnings due from LVMH, Amazon, Google, 3M,
UPS and Exxon.
    Energy shares will be in the spotlight after Royal Dutch Shell said
it would step-up disposals and seek to return a greater share of earnings to
investors as it posted fourth quarter profits in line with its downgraded
    Banking shares will also be in the spotlight after Santander, the
euro zone's biggest bank, fell short of analysts' expectations as it posted 2013
                                        LAST         PCT CHG    NET CHG
 S&P 500                                1,774.20     -1.02 %    -18.3
 NIKKEI                                 15,007.06    -2.45 %    -376.85
 MSCI ASIA EX-JP                        443.57       -0.61      -2.71
 EUR/USD                                1.3646       -0.12 %    -0.0016
 USD/JPY                                102.37       0.09 %     0.0900
 10-YR US TSY YLD                       2.697        --         0.02
 10-YR BUND YLD                         1.634        --         -0.01
 SPOT GOLD                              $1,260.80    -0.55 %    -$6.99
 US CRUDE                               $97.45       0.09 %     0.09
  > GLOBAL MARKETS-Asia shares lurch lower, China data darkens mood 
  > US STOCKS-Wall St sells off after Fed sticks with stimulus cuts 
  > Tokyo's Nikkei share average closes down 2.45 pct 
  > FOREX -Yen edges higher as risk aversion flares up 
  > PRECIOUS-Gold edges lower as Chinese support fades ahead of holiday 
  > METALS-LME copper sinks to near two month trough on China PMI 
  > Brent holds near $108 on cold spell, stimulus cut weighs 
    The oil major said it would step-up disposals and seek to return a greater
share of earnings to investors as it posted fourth quarter profits in line with
its downgraded forecast. 
    The euro zone's biggest bank on Thursday fell short of analysts'
expectations as it posted a net profit of 4.37 billion euros ($5.96 billion) for
2013, nearly double what it earned the year before as charges on soured real
estate exposures fell. 
    The world's second biggest fashion retailer said it was optimistic for 2014
even after it reported disappointing fourth-quarter profits. 
    Swiss drugmaker Roche reported full-year profit on Thursday that fell short
of expectations, hit by the strengthening of the Swiss franc against the U.S.
dollar and the Japanese yen. 
    The mobile telecom gear maker posted sales and fourth-quarter operating
profit below expectations on Thursday and said network projects in China and
Russia had not compensated for lower sales in North America and Japan.
    The Nordic telecom operator said it expected flat sales and margins in 2014
after reporting fourth-quarter profit below expectations. 
    Fragrance and flavour maker Givaudan hiked its dividend by 30 percent and
said it wants to continue to gain market share, after full-year net profit beat
    The Danish insulin producer edged its financial guidance for 2014 higher,
saying it now expects sales to grow by 8-11 percent and operating profit to grow
by around 10 percent in local currencies. 
    The way daily currency benchmarks are set in the $5-trillion-a-day market
needs to be looked at but limiting trade at daily fixings is not the answer,
Deutsche Bank chairman Paul Achleitner said on Wednesday.
    Separately, Deutsche Bank has suspended the head of its emerging markets
foreign exchange trading desk in New York in connection with ongoing
investigations into the alleged manipulation of the global currency market, a
source familiar with the matter said. 
    PSA Peugeot Citroen Chairman Thierry Peugeot has written to his cousin
Robert Peugeot, head of the FFP family holding, to criticise a planned tie-up
with China's Dongfeng Motor 0489.HK that would dilute the family's influence,
Les Echos reported.
    Dassault Systemes said on Thursday it planned to buy San-Diego based
software firm Accelrys in an all-cash tender offer valuing the U.S.
company at around $750 million, as it seeks to expand its product portfolio.
    German department store retailer Karstadt saw sales drop 3 percent in the
key Christmas period, highlighting the challenge its incoming chief executive

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